We often hear about people living above their means, but did you know one of the quickest ways to get ahead financially is to seek to live below your means each month? This means spending less than you make with each paycheck. By saving the extra money, you will have a nice savings account, and over time, a substantial nest egg that can sustain you for years to come.
Spending less than you earn is really the only way to get ahead with money. During an economic time when it seems like it is nearly impossible to only spend what you make each month, how do you actually live below your means?
Save Money on Food
It might seem like food is one area you cannot cut back on when you spend money. In fact, this one area you can save you a tremendous amount of money each month if you are wise with how you spend your money on food. There are a number of things you can do to cut back when it comes to food but it is not a one size fits all approach. What works for one person may not work for another. The goal is to find a way you can can accomplish cutting back on food costs that you can stick with.
A few areas you can look at trimming your food budget are:
Buy Generic. Many times the store brands are the same quality as the name brand and they can save a tremendous amount a money.
Avoid Prepared Food. Buying food, such as frozen dinners and other store bought food that is already prepared can be a needless waste of money. They are overpriced and less healthy. Sticking to a simple meal, such as meat, salad, and bread is nearly as easy and substantially cheaper than their inferior overpriced counterpart.
Don't Eat Out Often. Many people eat out multiple times per week. While completely cutting the restaurant experience may be unreasonable. significantly cutting back can make a big difference in saving money.
Keep Your Car
While there certainly is truth to the fact that cars dramatically lose value over time, keeping a car for a long period of time can greatly lead to excellent financial health. When you are without a car payment, living below your means becomes much easier. Instead of finding a new car and creating a new car payment, save the money you would have put toward a car. This is a great way to regularly use less money than you earn each month.
Make Hard Cuts in Your Budget
There are certainly some areas of your budget that are easier than others to make cuts. Cut out the easy things but also take a hard look at things that may not be so easy. Are there areas of your budget that are more of a want than a need? Are you willing to give it up in order to accomplish your financial goals? A hard look at your budget today with tough cuts will pay great dividends tomorrow.
Limit Credit Card Spending
Credit cards almost make money seem like a fantasy. There is nothing physical that permanently leaves your presence. Using cash and greatly limiting your credit card use does two things: it reminds you of just how much you are spending each week and it forces you to live at a level that is congruent to your income. Ultimately, the goal would be to surpass the amount of your income versus your spending.
Clarify Your Purpose
Anyone who sees the value of living below your means has a reason behind it. Whether you are saving up for a big purchase or just pursuing a comfortable retirement, reminding yourself regularly of why you are doing it can be a very powerful motivator to help you accomplish your goals.
There are a number of ways you can save money to live below your means. Get creative in how your strive to decrease your spending each month so you have money to put away to save towards your future goals. When you spend less than your bring in each month, you are well on your way to great financial health.
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